KTGY Group Lands Resort Project in Mexico : The fledgling Irvine architectural firm started by eight renegades from CYP Inc. has done well despite the recession.

Robert M. Yamafuji was exhausted but triumphant when he walked into the Irvine office of KTGY Group Inc.

After a series of negotiations in Mexico, his fledgling architectural firm has won a bid to plan and design 1,500 residential resort units in Mexico, a project valued at $375 million. It is part of a $1-billion hotel resort that a Mexican-Spanish joint venture is building along the shores of southern Mexico.

Gary Gregson, a KTGY senior principal, rushed out and bought eight bottles of champagne, one for each founding member of KTGY--all renegades from CYP Inc., a major Orange County architectural firm.

Nancy Trudeau, the only female principal, and colleague Hiro Kinoshita began planning work-related vacation trips to Mexico, while the other principals--Aret Gulmezian, John Tully and Frank Yonemori--reached for the phone to say gracias to their new clients. James Thomas, the group’s chief financial officer, started preparing a business plan for the project.

KTGY comprises the first initial of the last names of its eight founding principals.

Seven months after Yamafuji and the others formed KTGY, the company captured one of the largest projects awarded to an Orange County architectural firm this year. The project will be built on 1,700 acres and will include three hotels, two golf courses and a marina. Gulmezian and Susan Kazawa, an architect in KTGY’s Florida office, will oversee the Mexico project.

KTGY’s revenue, based on current contracts, is about $5 million, and Yamafuji is projecting that by the end of its first year, the group’s revenue should reach $7 million.

Since its split with CYP in November--which CYP President Bob Nasraway attributed to “philosophical differences about where the practice should go”--KTGY has won more than 150 large and small projects. Two of them were in the seven-figure range.

Many of CYP’s clients in Asia shifted to KTGY after the split. In addition, architects in other CYP offices also left the firm. For example, employees in Bangkok, Thailand, left CYP to form KTGY’s new operation in that country, while those in the CYP office in Ft. Lauderdale, Fla., also joined forces with KTGY to run its Caribbean and East Coast business.

“This made it easier for us to become a global company,” Yamafuji said.

It was tough in the beginning because the recession has slowed the number and sizes of available projects in the market. In addition, many builders and developers are demanding more affordable projects in response to an anemic economy. “We rolled up our sleeves, got on the drawing boards and worked 12-hour days,” Tully said. “We had to figure out ways to provide creative but affordable planning and architectural designs to builders/developers that are hurt by the recession.”

KTGY assembled an in-house team of architects, planners and environmental experts to provide a range of development services that would make it convenient for clients to plan projects. This includes environmental impact studies and policy planning that KTGY would need to obtain zoning permission for projects.

“Our policy is to create a good working relationship between our Asian and American clients,” said Yamafuji, KTGY’s president. “We feel that the world is getting smaller and most major projects are financed by international groups and the joint-venture partners are often from different countries.”

In recent months, KTGY has become a broker of sorts, bringing together Asian developers and investors with American companies to develop projects in Asia as well as in North America.

But KTGY is not without its problems. Its divorce from CYP has not been amicable, and in March, CYP filed a lawsuit against KTGY and its eight principals, accusing them of soliciting CYP clients and employees, slander and conspiring to steal its plans, drawings and materials.

Yamafuji and KTGY’s other principals denied the allegations, but declined further comment on the lawsuit.

Since the split, CYP has integrated the functions of its divisions to foster a team concept, Nasraway said. He insists that the departure of Yamafuji and other key employees did not affect CYP, which was once the county’s largest architectural firm.

“All architectural firms are in difficulty because of the recession; however, we’re optimistic about the future,” Nasraway said.

“We have bottomed out in our work, and we see an increase of workload for the balance of the year,” he added.